Banking shares have enjoyed their best week for months. They moved higher again yesterday despite an overall fall in the market, as hopes grew that bail-out plans on both sides of the Atlantic will ease the current strains and avoid the need for a full nationalisation of the sector. Even analyst Sandy Chen of Panmure Gordon, one of the banks' severest critics, became a little less negative. In a note he said: "Following the recent 50% swings [both up and down] in shares, it seems farcical that UK bank shares have only rebounded to about where they were a fortnight ago." Barclays ended 5.8p up at 106.1p, Royal Bank of Scotland rose 1p to 22p, and Lloyds Banking Group was lifted 1.7p to 90.7p.

Property groups - hit recently by worries about falling asset values and possible rights issues - rallied after an upbeat note on the sector from Morgan Stanley. Land Securities climbed 56p to 689.5p, Hammerson was 17.5p higher at 405.75p and Liberty International closed 13.5p higher at 372.75p.

But economic fears and commodities companies undermined the market. Xstrata fell 76p to 569.5p on further consideration of Thursday's £4.1bn cash call, while hedge fund Davidson Kempner International revealed a 0.45% short position in the miner (something which now has to be disclosed when a company has a rights issue.) BHP Billiton lost 95p to £11.81 on worries about its half-year figures due out next week. Rio Tinto - which admitted earlier in the week it might tap shareholders for cash to cut debt by $10bn (£6.9bn) - reversed earlier gains to close 44p lower at £15.06. The company has sold potash and iron ore assets to Brazil's Vale for $1.6bn to help cut borrowings. Cazenove's David Butler said: "This move provides, in our view, further evidence that Rio is trying to avoid coming to the market for cash if it possibly can."

So, despite the optimism in the banking sector, the FTSE 100 ended 40.47 points lower at 4149.64. Wall Street did not help, with the Dow Jones down more than 100 points by the time London closed. US GDP fell by less than expected in the fourth quarter - an annualised figure of 3.8% as opposed to forecasts of 5.4% - but it was still the weakest performance for 26 years. Japan release poor employment and output figures.

British Airways fell 10.8p to 120.1p as Citigroup issued a negative note on the airline sector, while Marks & Spencer dipped 1p to 231p despite a buy note from Collins Stewart which set a 375p target. Russian oil group Sibir Energy jumped 54.5p to 188p as it pulled out of a controversial deal to buy property assets from its major shareholder Chalva Tchigirinski. Leisure group Rank slipped 1p to 59.25p despite a House of Lords motion this week allowing more gaming machines in bingo clubs.